China contests that India occupies some 90,000 sq km of Chinese territory, most of it in Arunachal Pradesh, which India says is part of India.

While the issue of stapled visa is expected to be sorted out, India has concerns about Chinese-aided projects in Pakistan-occupied Kashmir.

On trade imbalances, New Delhi wants China to buy more than primary products from India, and insists Beijing source IT, agricultural and pharmaceutical products, where India enjoys a competitive advantage.

There are concerns over the water issues as well, especially the proposed "south-to-north water diversion" project.

"This project, as the name suggests, is aimed at diverting water from the south to the north along three routes. Though the central and middle routes have no impact on India, the western route, from the Brahmaputra, is a matter of concern," said an official.

Union water resources minister Pavan Kumar Bansal will be part of the delegation-level talks.